Federal Register / Vol. 75, No. 85 / Tuesday, May 4, 2010 / Notices 23827 

11The text of the proposed rule change is 

available on the Commission’s Web site at http:// 

www.sec.gov/rules/sro.shtml. 

12 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3See Securities Exchange Act Release No. 61876 

(April 8, 2010), 75 FR 19436 (April 14, 2010) (SR– 

NASDAQ–2010–025). 

4NASDAQ OMX also amended its Corporate 

Governance Guidelines to reflect the majority vote 

standard for uncontested director elections. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–NASDAQ–2010–050. This 

file number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission,11 all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, on official business 

days between the hours of 10 a.m. and 

3 p.m. Copies of the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–NASDAQ–2010–050 and 

should be submitted on or before May 

25, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.12

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–10275 Filed 5–3–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61993; File No. SR–BX– 

2010–029] 

Self-Regulatory Organizations; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change by NASDAQ 

OMX BX, Inc. To Amend the By-Laws 

of The NASDAQ OMX Group, Inc. 

April 27, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 

(‘‘Act’’) 1, and Rule 19b–4 2 thereunder, 

notice is hereby given that on April 9, 

2010, NASDAQ OMX BX, Inc. (‘‘BX’’ or 

‘‘Exchange’’) filed with the Securities 

and Exchange Commission (‘‘SEC’’ or 

‘‘Commission’’) the proposed rule 

change as described in Items I and II 

below, which Items have been prepared 

by the Exchange. The Commission is 

publishing this notice to solicit 

comments on the proposed rule change 

from interested persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of Substance of 

the Proposed Rule Change 

The Exchange proposes to file a 

proposed rule change relating to the ByLaws of its parent corporation, The 

NASDAQ OMX Group, Inc. (‘‘NASDAQ 

OMX’’). 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nasdaqtrader.com/ 

micro.aspx?id=BXRulefilings, at the 

principal office of the Exchange, on the 

Commission’s Web site at http:// 

www.sec.gov, and at the Commission’s 

Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant aspects of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

NASDAQ OMX has proposed making 

certain amendments to its By-Laws to 

make improvements in its governance. 

In SR–NASDAQ–2010–025, The 

NASDAQ Stock Market LLC (‘‘NASDAQ 

Exchange’’) sought Commission 

approval to adopt these By-Laws 

changes as part of the rules of NASDAQ 

Exchange, and the Commission granted 

approval to these changes in an order 

dated April 8, 2010.3 The Exchange is 

now submitting this filing on an 

immediately effective basis to adopt the 

same By-Law changes as rules of the 

Exchange. 

The NASDAQ OMX By-Laws 

previously provided that each director 

receiving a plurality of the votes at any 

election of directors at which a quorum 

is present is duly elected to the Board. 

Under Corporate Governance Guidelines 

adopted by the Board, however, any 

director in an uncontested election who 

received a greater number of votes 

‘‘withheld’’ from his or her election than 

votes ‘‘for’’ such election was required to 

tender his or her resignation promptly 

following receipt of the certification of 

the stockholder vote. The NASDAQ 

OMX Nominating & Governance 

Committee then considered the 

resignation offer and recommended to 

the Board whether to accept it. Within 

90 days after the certification of the 

election results, the Board determined 

whether to accept or reject the 

resignation. Promptly thereafter, the 

Board announced its decision by means 

of a press release. In a contested election 

(i.e., where the number of nominees 

exceeds the number of directors to be 

elected), the unqualified plurality 

standard controls. 

Uncontested Election 

NASDAQ OMX recently amended its 

By-Laws to adopt a majority vote 

standard, specifically By-Law Article IV, 

Section 4.4 of the By-Laws was 

amended to provide that, in an 

uncontested election, directors shall be 

elected by holders of a majority of the 

votes cast at any meeting for the election 

of directors at which a quorum is 

present.4 Under the majority voting 

standard, a nominee who fails to receive 

the requisite vote will not be duly 

mstockstill on DSKH9S0YB1PROD with NOTICES

23828 Federal Register / Vol. 75, No. 85 / Tuesday, May 4, 2010 / Notices 

5See NASDAQ OMX By-Law Article IV, Section 

4.5. 

6See NASDAQ OMX Certificate of Incorporation 

at Article IV, C.1(a). 

7See NASDAQ OMX Certificate of Incorporation 

at Article IV, C.1(b)2. 

8 15 U.S.C. 78f. 

9 15 U.S.C. 78f(b)(2)[sic], (5). 

10 15 U.S.C. 78s(b)(3)(A). 

11 17 CFR 240.19b–4(f)(6). In addition, Rule 19b– 

4(f)(6) requires a self-regulatory organization to give 

the Commission written notice of its intent to file 

the proposed rule change at least five business days 

prior to the date of filing of the proposed rule 

change, or such shorter time as designated by the 

Commission. The Exchange has satisfied this 

requirement. 

12See Securities Exchange Act Release No. 61876 

(April 8, 2010), 75 FR 19436 (April 14, 2010) (SR– 

NASDAQ–2010–025). 

13 Id. 

14For purposes only of waiving the 30-day 

operative delay, the Commission has considered the 

proposed rule’s impact on efficiency, competition, 

and capital formation. See 15 U.S.C. 78c(f). 

elected to the Board. The By-Laws 

require that any incumbent nominee, as 

a condition to his or her nomination for 

election, must submit in writing an 

irrevocable resignation, the effectiveness 

of which is conditioned upon the 

director’s failure to receive the requisite 

vote in any uncontested election and the 

Board’s acceptance of the resignation. 

The resignation will be considered by 

the Nominating & Governance 

Committee and acted upon by the Board 

in the same manner described above.5

Acceptance of that resignation by the 

Board shall be in accordance with the 

policies and procedures adopted by the 

Board for such purpose. NASDAQ OMX 

specifies its policies and procedures 

pertaining to the election of its directors 

in its By-Laws. Specifically, the policies 

and procedures for the acceptance of the 

resignation of a director, by the Board, 

are proposed to be specified in By-Law 

Article IV, Section 4.4. There are no 

additional policies and procedures other 

than what is indicated in the By-Laws. 

In the event that NASDAQ OMX 

proposes to further amend its By-Laws 

with respect to the election of directors, 

including the adoption of any policies 

and procedure with respect to such 

election, NASDAQ OMX shall file a 

proposed rule change with the 

Commission to seek approval of those 

amendments. 

Contested Election 

NASDAQ OMX codified its process 

for a contested election. The directors 

will continue to be elected by a plurality 

vote in a contested election. There is no 

change to the process for contested 

elections because if a majority voting 

standard were to apply in a contested 

election, the likelihood of a ‘‘failed 

election’’ (i.e., a situation in which no 

director receives the requisite vote) 

would be more pronounced. Moreover, 

the rationale underpinning the majority 

voting policy does not apply in 

contested elections where stockholders 

are offered a choice among competing 

candidates. Directors are elected by a 

plurality of votes present in person or 

represented by proxy at a meeting. The 

directors who receive the greatest 

number of votes cast for election of 

directors at the meeting will be elected. 

General Election Requirements 

The following applies to elections of 

directors and were not amended. Each 

share of common stock has one vote,6

subject to the voting limitation in 

NASDAQ OMX’s certificate of 

incorporation that generally prohibits a 

holder from voting in excess of 5% of 

the total voting power of NASDAQ 

OMX.7 In addition, each note holder is 

entitled to the number of votes equal to 

the number of shares of common stock 

into which such note could be 

converted on the record date, subject to 

the 5% voting limitation contained in 

the certificate of incorporation. 

The presence of owners of a majority 

(greater than 50%) of the votes entitled 

to be cast by holder of NASDAQ OMX 

voting securities constitutes a quorum. 

Presence may be in person or by proxy. 

Any securities not voted, by abstention, 

will not impact the vote. 

2. Statutory Basis 

The Exchange believes that the 

proposed rule change is consistent with 

the provisions of Section 6 of the Act,8

in general, and with Sections 6(b)(1) and 

(b)(5) of the Act,9 in particular, in that 

the proposal enables the Exchange to be 

so organized as to have the capacity to 

be able to carry out the purposes of the 

Act and to comply with and enforce 

compliance by members and persons 

associated with members with 

provisions of the Act, the rules and 

regulations thereunder, and selfregulatory organization rules, and is 

designed to prevent fraudulent and 

manipulative acts and practices, to 

promote just and equitable principles of 

trade, to foster cooperation and 

coordination with persons engaged in 

regulating, clearing, settling, processing 

information with respect to, and 

facilitating transactions in securities, to 

remove impediments to and perfect the 

mechanism of a free and open market 

and a national market system, and, in 

general, to protect investors and the 

public interest. The proposed 

amendments adopting a majority vote 

standard would enable the directors to 

be elected in a manner reflective of the 

desires of shareholders and provide a 

mechanism to protect against the 

election of directors by less than a 

majority vote of the shareholders. 

B. Self-Regulatory Organization’s 

Statement on Burden on Competition 

The Exchange does not believe that 

the proposed rule change will impose 

any burden on competition not 

necessary or appropriate in furtherance 

of the purposes of the Act. 

C. Self-Regulatory Organization’s 

Statement on Comments on the 

Proposed Rule Change Received From 

Members, Participants, or Others 

No written comments were either 

solicited or received. 

III. Date of Effectiveness of the 

Proposed Rule Change and Timing for 

Commission Action 

Because the foregoing proposed rule 

change does not: (i) Significantly affect 

the protection of investors or the public 

interest; (ii) impose any significant 

burden on competition; and (iii) become 

operative for 30 days after the date of 

the filing, or such shorter time as the 

Commission may designate, if 

consistent with the protection of 

investors and the public interest, it has 

become effective pursuant to 19(b)(3)(A) 

of the Act 10 and Rule 19b–4(f)(6) 11

thereunder. 

The Exchange has noted that the 

proposed rule change is identical to a 

proposed rule change recently approved 

by the Commission with respect to the 

NASDAQ Exchange 12 and has 

requested that the Commission waive 

the 30-day operative delay to ensure 

that NASDAQ OMX is able to 

implement the proposed rule change 

without undue delay. The Commission 

has determined that waiving the 30-day 

operative delay is consistent with the 

protection of investors and the public 

interest because such waiver will enable 

NASDAQ OMX to implement the 

proposed rule change without undue 

delay in a manner consistent with a 

proposed rule change previously 

approved by the Commission.13

Therefore, the Commission designates 

the proposal operative upon filing.14

At any time within 60 days of the 

filing of the proposed rule change, the 

Commission may summarily abrogate 

such rule change if it appears to the 

Commission that such action is 

necessary or appropriate in the public 

interest, for the protection of investors, 

or otherwise in furtherance of the 

purposes of the Act. 

mstockstill on DSKH9S0YB1PROD with NOTICES

Federal Register / Vol. 75, No. 85 / Tuesday, May 4, 2010 / Notices 23829 

15 17 CFR 200.30–3(a)(12). 

1 15 U.S.C. 78s(b)(1). 

2 17 CFR 240.19b–4. 

3The Exchange’s two modes of order interaction 

are described in NSX Rule 11.13(b). 

4See Explanatory Endnote (6) to the Fee 

Schedule. 

5See Explanatory Endnote (12) to the Fee 

Schedule. 

IV. Solicitation of Comments 

Interested persons are invited to 

submit written data, views, and 

arguments concerning the foregoing, 

including whether the proposed rule 

change is consistent with the Act. 

Comments may be submitted by any of 

the following methods: 

Electronic Comments 

• Use the Commission’s Internet 

comment form (http://www.sec.gov/ 

rules/sro.shtml); or 

• Send an e-mail to rulecomments@sec.gov. Please include File 

Number SR–BX–2010–029 on the 

subject line. 

Paper Comments 

• Send paper comments in triplicate 

to Elizabeth M. Murphy, Secretary, 

Securities and Exchange Commission, 

100 F Street, NE., Washington, DC 

20549–1090. 

All submissions should refer to File 

Number SR–BX–2010–029. This file 

number should be included on the 

subject line if e-mail is used. To help the 

Commission process and review your 

comments more efficiently, please use 

only one method. The Commission will 

post all comments on the Commission’s 

Internet Web site (http://www.sec.gov/ 

rules/sro.shtml). Copies of the 

submission, all subsequent 

amendments, all written statements 

with respect to the proposed rule 

change that are filed with the 

Commission, and all written 

communications relating to the 

proposed rule change between the 

Commission and any person, other than 

those that may be withheld from the 

public in accordance with the 

provisions of 5 U.S.C. 552, will be 

available for Web site viewing and 

printing in the Commission’s Public 

Reference Room, on official business 

days between the hours of 10 a.m. and 

3 p.m. Copies of the filing also will be 

available for inspection and copying at 

the principal office of the Exchange. All 

comments received will be posted 

without change; the Commission does 

not edit personal identifying 

information from submissions. You 

should submit only information that 

you wish to make available publicly. All 

submissions should refer to File 

Number SR–BX–2010–029 and should 

be submitted on or before May 25, 2010. 

For the Commission, by the Division of 

Trading and Markets, pursuant to delegated 

authority.15

Elizabeth M. Murphy, 

Secretary. 

[FR Doc. 2010–10309 Filed 5–3–10; 8:45 am] 

BILLING CODE 8010–01–P 

SECURITIES AND EXCHANGE 

COMMISSION 

[Release No. 34–61996; File No. SR–NSX– 

2010–04] 

Self-Regulatory Organizations; 

National Stock Exchange, Inc.; Notice 

of Filing and Immediate Effectiveness 

of Proposed Rule Change To Amend 

the Fee and Rebate Schedule Issued 

Pursuant to Exchange Rule 16.1(c) 

With Respect to the Liquidity Adding 

Rebate for Securities Priced Under 

One Dollar 

April 28, 2010. 

Pursuant to Section 19(b)(1) of the 

Securities Exchange Act of 1934 (the 

‘‘Act’’) 1 and Rule 19b–4 thereunder,2

notice is hereby given that on April 9, 

2010, National Stock Exchange, Inc. 

filed with the Securities and Exchange 

Commission (‘‘Commission’’) the 

proposed rule change, as described in 

Items I, II, and III below, which Items 

have been prepared by the Exchange. 

The Commission is publishing this 

notice to solicit comment on the 

proposed rule change from interested 

persons. 

I. Self-Regulatory Organization’s 

Statement of the Terms of the Substance 

of the Proposed Rule Change 

National Stock Exchange, Inc. 

(‘‘NSX® ’’ or ‘‘Exchange’’) is proposing to 

amend the Fee and Rebate Schedule (the 

‘‘Fee Schedule’’) issued pursuant to 

Exchange Rule 16.1(c) to adjust the 

liquidity adding rebate for securities 

priced under one dollar. 

The text of the proposed rule change 

is available on the Exchange’s Web site 

at http://www.nsx.com, at the principal 

office of the Exchange, and at the 

Commission’s Public Reference Room. 

II. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

In its filing with the Commission, the 

Exchange included statements 

concerning the purpose of and basis for 

the proposed rule change and discussed 

any comments it received on the 

proposed rule change. The text of these 

statements may be examined at the 

places specified in Item IV below. The 

Exchange has prepared summaries, set 

forth in sections A, B, and C below, of 

the most significant parts of such 

statements. 

A. Self-Regulatory Organization’s 

Statement of the Purpose of, and 

Statutory Basis for, the Proposed Rule 

Change 

1. Purpose 

With this rule change, the Exchange is 

proposing to modify the Fee Schedule to 

adjust the liquidity adding rebate for 

securities priced under one dollar in 

both the Automatic Execution mode of 

order interaction (‘‘AutoEx’’) and the 

Order Delivery mode of order 

interaction (‘‘Order Delivery’’).3

AutoEx Liquidity Adding Rebate For 

Securities Priced Under One Dollar 

For orders in securities priced under 

one dollar that provide liquidity in 

AutoEx, the Fee Schedule currently 

provides that an ETP Holder receives a 

rebate of 0.25% of trade value, where 

‘‘trade value’’ is defined as the dollar 

amount equal to the price per share 

multiplied by the number of shares 

executed.4 The proposed rule change 

adjusts such rebate to be the lesser of 

the foregoing amount and 25% of the 

quote spread, where ‘‘quote spread’’ is 

defined as the dollar amount equal to 

the number of shares executed 

multiplied by the difference at the time 

of execution between (x) the price per 

share of the national best bid, and (y) 

the price per share of the national best 

offer.5

Order Delivery Liquidity Adding Rebate 

For Securities Priced Under One Dollar 

For orders in securities priced under 

one dollar that provide liquidity in 

Order Delivery, the Fee Schedule 

currently provides that an ETP Holder 

receives a rebate of 0.20% of trade 

value. The proposed rule change adjusts 

such rebate to be the lesser of 0.20% of 

trade value and 20% of the quote 

spread. 

In both Order Delivery and AutoEx, 

no quote spread rebate is payable in the 

event of locked or crossed quotations. 

Finally, the proposed rule change 

modifies for purposes of internal 

consistency the language in the Fee 

Schedule to make clear that Zero 

mstockstill on DSKH9S0YB1PROD with NOTICES